diff --git a/jest.config.js b/jest.config.js
index 5114fe6..8a23dfe 100644
--- a/jest.config.js
+++ b/jest.config.js
@@ -1,4 +1,5 @@
 export default {
   testEnvironment: "node",
   transform: {},
+  setupFilesAfterEnv: ["./test/jest.setup.js"],
 };
diff --git a/src/config/validateEnv.js b/src/config/validateEnv.js
index 1c583be..595cc97 100644
--- a/src/config/validateEnv.js
+++ b/src/config/validateEnv.js
@@ -31,6 +31,13 @@ const optionalEnvVars = [
 ];
 
 export const validateEnv = () => {
+  // Test mode: provide defaults for development of tests
+  if (process.env.NODE_ENV === "test") {
+    process.env.JWT_SECRET = process.env.JWT_SECRET || "test-secret-key-at-least-32-characters-long";
+    process.env.MONGO_URI = process.env.MONGO_URI || "mongodb://test-db:27017/dnb-test";
+    process.env.PORT = process.env.PORT || "5000";
+  }
+
   // Default values for TTLs if not provided
   process.env.ACCESS_TOKEN_TTL = process.env.ACCESS_TOKEN_TTL || "15m";
   process.env.REFRESH_TOKEN_TTL = process.env.REFRESH_TOKEN_TTL || "30d";
diff --git a/src/controllers/stellar/donationController.js b/src/controllers/stellar/donationController.js
index 50b05be..bfd81b5 100644
--- a/src/controllers/stellar/donationController.js
+++ b/src/controllers/stellar/donationController.js
@@ -8,6 +8,7 @@ import {
   buildSep7Uri,
   submitTransaction,
   verifyPaymentOperations,
+  validateSignedPaymentXdr,
   getExplorerUrl,
   NETWORK,
   DONATION_WALLET_PUBLIC_KEY,
@@ -93,7 +94,8 @@ export const initializeDonation = async (req, res) => {
       amount: amount.toString(),
       network: NETWORK,
       status: "pending",
-      stellarTxHash: paymentTx.hash, // Temporary hash, will be replaced with actual
+      expectedHash: paymentTx.hash,
+      memo: DONATION_MEMO,
     });
 
     await donation.save({ session });
@@ -159,7 +161,40 @@ export const submitDonation = async (req, res) => {
       });
     }
 
-    // Update status to submitted
+    // Build expected payments array for validation
+    const expectedPayments = [
+      {
+        destination: donation.creatorWallet,
+        amount: donation.amount,
+      },
+    ];
+
+    // Validate signed XDR contents (memo, payments, optional source)
+    try {
+      validateSignedPaymentXdr(
+        signedXdr,
+        expectedPayments,
+        donation.memo,
+        donation.buyerWallet,
+        true
+      );
+    } catch (validationError) {
+      donation.status = "failed";
+      donation.failureReason = `validation_failed: ${validationError.message}`;
+      await donation.save({ session });
+      await session.commitTransaction();
+      paymentsFailed.inc({ type: "donation", reason: "validation_failed" });
+
+      logger.error(`Donation ${donationId} validation failed:`, validationError.message);
+
+      return res.status(400).json({
+        success: false,
+        message: "Signed transaction does not match expected payment details",
+        error: validationError.message,
+      });
+    }
+
+    // Update status to submitted after validation
     donation.status = "submitted";
     donation.submittedAt = new Date();
     await donation.save({ session });
@@ -186,12 +221,8 @@ export const submitDonation = async (req, res) => {
     }
 
     // Verify on-chain that the donation actually paid the fund (amount, destination, asset)
-    const verification = await verifyPaymentOperations(result.hash, [
-      {
-        destination: donation.creatorWallet,
-        amount: donation.amount,
-      },
-    ]);
+    // (expectedPayments already defined above for pre-submission validation)
+    const verification = await verifyPaymentOperations(result.hash, expectedPayments);
 
     if (!verification.verified) {
       donation.stellarTxHash = result.hash;
diff --git a/src/controllers/stellar/paymentController.js b/src/controllers/stellar/paymentController.js
index 28272a4..8add5fb 100644
--- a/src/controllers/stellar/paymentController.js
+++ b/src/controllers/stellar/paymentController.js
@@ -11,6 +11,7 @@ import {
   submitTransaction,
   verifyTransaction,
   verifyPaymentOperations,
+  validateSignedPaymentXdr,
   findPaymentPaths,
   applySlippage,
   NETWORK,
@@ -333,7 +334,8 @@ export const initializePayment = async (req, res) => {
       network: NETWORK,
       status: "pending",
       settlement: settlementMode,
-      stellarTxHash: paymentTx.hash,
+      expectedHash: paymentTx.hash,
+      memo,
       ...(sendAssetInput && {
         sendAsset: sendAssetInput,
         sendMax,
@@ -428,7 +430,51 @@ export const submitPayment = async (req, res) => {
       });
     }
 
-    // Update status to submitted
+    // Build expected payments to validate XDR BEFORE submit
+    let expectedPayments = transaction.platformFee?.platformAmount
+      ? [
+          {
+            destination: transaction.creatorWallet,
+            amount: transaction.platformFee.creatorAmount,
+          },
+          {
+            destination: transaction.platformFee.platformWallet,
+            amount: transaction.platformFee.platformAmount,
+          },
+        ]
+      : [
+          {
+            destination: transaction.creatorWallet,
+            amount: transaction.amount,
+          },
+        ];
+
+    // Validate signed XDR contents (memo, payments, optional source)
+    try {
+      validateSignedPaymentXdr(
+        signedXdr,
+        expectedPayments,
+        transaction.memo,
+        transaction.buyerWallet,
+        true
+      );
+    } catch (validationError) {
+      transaction.status = "failed";
+      transaction.failureReason = `validation_failed: ${validationError.message}`;
+      await transaction.save({ session });
+      await session.commitTransaction();
+      paymentsFailed.inc({ type: "purchase", reason: "validation_failed" });
+
+      logger.error(`Transaction ${transactionId} validation failed:`, validationError.message);
+
+      return res.status(400).json({
+        success: false,
+        message: "Signed transaction does not match expected payment details",
+        error: validationError.message,
+      });
+    }
+
+    // Update status to submitted after validation
     transaction.status = "submitted";
     transaction.submittedAt = new Date();
     await transaction.save({ session });
@@ -457,23 +503,7 @@ export const submitPayment = async (req, res) => {
 
     // Verify on-chain that the creator (and platform, when a fee was applied)
     // actually received the expected USDC amounts
-    const expectedPayments = transaction.platformFee?.platformAmount
-      ? [
-          {
-            destination: transaction.creatorWallet,
-            amount: transaction.platformFee.creatorAmount,
-          },
-          {
-            destination: transaction.platformFee.platformWallet,
-            amount: transaction.platformFee.platformAmount,
-          },
-        ]
-      : [
-          {
-            destination: transaction.creatorWallet,
-            amount: transaction.amount,
-          },
-        ];
+    // (expectedPayments already defined above for pre-submission validation)
 
     const verification = await verifyPaymentOperations(
       result.hash,
diff --git a/src/models/Transaction.js b/src/models/Transaction.js
index 9d460fc..2c59a1b 100644
--- a/src/models/Transaction.js
+++ b/src/models/Transaction.js
@@ -6,10 +6,17 @@ const transactionSchema = new mongoose.Schema(
     // Transaction identification
     stellarTxHash: {
       type: String,
-      required: true,
+      sparse: true,
       unique: true,
       index: true,
     },
+    expectedHash: {
+      type: String,
+      index: true,
+    },
+    memo: {
+      type: String,
+    },
     stellarLedger: {
       type: Number,
     },
diff --git a/src/services/stellar/stellarService.js b/src/services/stellar/stellarService.js
index e697768..593f5a4 100644
--- a/src/services/stellar/stellarService.js
+++ b/src/services/stellar/stellarService.js
@@ -386,6 +386,71 @@ export const submitTransaction = async (signedXdr) => {
   }
 };
 
+/**
+ * Validate a signed transaction XDR against expected payments and memo/source
+ * @param {string} signedXdr
+ * @param {Array<{destination:string, amount:string}>} expectedPayments
+ * @param {string} expectedMemo
+ * @param {string} expectedSource
+ * @param {boolean} requireSource
+ */
+export const validateSignedPaymentXdr = (
+  signedXdr,
+  expectedPayments = [],
+  expectedMemo,
+  expectedSource,
+  requireSource = true
+) => {
+  const tx = StellarSdk.TransactionBuilder.fromXDR(
+    signedXdr,
+    networkPassphrase
+  );
+
+  // Memo check
+  if (expectedMemo) {
+    const memo = tx.memo;
+    let memoText = null;
+    if (memo && memo._type === "text") {
+      const val = memo._value;
+      memoText = Buffer.isBuffer(val) ? val.toString() : String(val);
+    }
+    if (memoText !== expectedMemo) {
+      throw new Error("Memo mismatch");
+    }
+  }
+
+  // Source check
+  if (requireSource && expectedSource) {
+    if (tx.source !== expectedSource) {
+      throw new Error("Source account mismatch");
+    }
+  }
+
+  // Payment operations check
+  const paymentOps = tx.operations.filter((op) => op.type === "payment");
+
+  for (const expected of expectedPayments) {
+    const match = paymentOps.find((op) => {
+      const assetMatches =
+        (op.asset && op.asset.code === "USDC" && op.asset.issuer === USDC_ISSUER) ||
+        (op.asset_type === "credit_alphanum4" && op.asset?.code === "USDC" && op.asset?.issuer === USDC_ISSUER);
+
+      const amountMatches = toStroops(op.amount) === toStroops(expected.amount);
+      const destMatches = op.destination === expected.destination;
+
+      return assetMatches && amountMatches && destMatches;
+    });
+
+    if (!match) {
+      throw new Error(
+        `Signed XDR missing expected USDC payment of ${expected.amount} to ${expected.destination}`
+      );
+    }
+  }
+
+  return tx;
+};
+
 export const verifyTransaction = async (txHash) => {
   try {
     const tx = await timedHorizonCall("fetchTransaction", () =>
diff --git a/test/jest.setup.js b/test/jest.setup.js
new file mode 100644
index 0000000..6ad10cc
--- /dev/null
+++ b/test/jest.setup.js
@@ -0,0 +1,22 @@
+import { MongoMemoryServer } from "mongodb-memory-server";
+
+let mongod;
+
+beforeAll(async () => {
+  // Start in-memory MongoDB
+  mongod = await MongoMemoryServer.create();
+  const mongoUri = mongod.getUri();
+  
+  // Set test environment and MongoDB URI
+  process.env.NODE_ENV = "test";
+  process.env.MONGO_URI = mongoUri;
+  process.env.JWT_SECRET = process.env.JWT_SECRET || "test-secret-key-at-least-32-characters-long";
+  process.env.PORT = process.env.PORT || "5000";
+});
+
+afterAll(async () => {
+  if (mongod) {
+    await mongod.stop();
+  }
+});
+